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Meeting Renewable Energy and Land Use Objectives through Public–Private Biomass Supply Partnerships

This study in Applied Energy explores whether creation of localized bioenergy markets near existing military installations in the southeastern United States could address military renewable energy generation objectives while reducing urban encroachment. To stimulate creation of these markets, it models the use of public–private partnerships, pairing stable installation demand with stable supply from surrounding landowners. It employs the SubRegional Timber Supply (SRTS) model and the Forest and Agricultural Sector Model with Greenhouse Gases (FASOMGHG) to assess how markets influence forest and agriculture land use, renewable energy production, and greenhouse gas (GHG) mitigation at the regional and national levels. When all selected installations increase bioenergy capacity simultaneously, it finds increased preservation of forest land area, increased forest carbon storage in the region, and increased renewable energy generation at military installations. Nationally, however, carbon stocks are depleted as harvests increase, increasing GHG emissions even after accounting for potential displaced emissions from coal- or natural gas-fired generation. Increasing bioenergy generation on a single installation within the Southeast has very different effects on forest area and composition, yielding greater standing timber volume and higher forest carbon stock. In addition to demonstrating the benefits of linking two partial equilibrium models of varying solution technique, sectoral scope, and resource detail, results suggest that a tailored policy approach may be more effective in meeting local encroachment reduction and renewable energy generation objectives while avoiding negative GHG mitigation consequences.

Authors: Christopher S. Galik, Robert C. Abt, Gregory Latta, Andreanne Meley, and Jesse D. Henderson

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Environmental Economics

Energy Sector

Natural Resources

Modeling

Journal Articles

Weighing the Costs and Benefits of Climate Change to Our Children

In making climate change mitigation or adaptation investments, we need to think about how we value the welfare of future generations compared to our own. Assuming that future generations will be better off than our own, just as we are better off than our ancestors, a common formula for “discounting the future” recommends paying only 5 cents today for every dollar of benefits 100 years from now. This article in the journal the Future of Children describes three reasons to put more value on future benefits. First, other interpretations of preferences or observed data could increase the weight we place on future benefits by as much as a factor of five. Second, future climate change impacts, particularly those related to the loss of environmental amenities that have no close monetary substitutes, could be undervalued. Third, the risk that a warming climate could cause sudden and catastrophic changes that would drastically alter the size of the population could be misunderstood. Ultimately, many choices about how we value future generations’ welfare come down to ethical questions, and many of the decisions we must make come down to societal preferences—and those choices and decisions will be difficult to extract from data or theory.

Authors: Simon Dietz, Ben Groom, and William A. Pizer

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Climate and Energy

Environmental Economics

Journal Articles

Researching a Reimagined ESA: The Continued Need and Opportunity for Voluntary Conservation

Since passage of the U.S. Endangered Species Act (ESA) more than 40 years ago, federal agencies have sought to enhance the engagement of non-federal landowners and managers in recovery actions. An effort to design programs and policies to facilitate voluntary conservation activities under the ESA has been renewed, but the adoption and effectiveness of these activities could be diminished by the lack of data to address three issues. First, landowners and land managers must be motivated to participate in pre-listing and voluntary conservation and to do so at the scale necessary to achieve conservation outcomes. Second, activities need to be effective in promoting conservation. Third, laws and administrative processes must accommodate or facilitate desired approaches. This working paper identifies data needs in each of these three areas, reviews experience with existing voluntary conservation approaches under the ESA, and recommends research and implementation strategies to make voluntary conservation approaches more widespread.

Authors: Christopher S. Galik, Jacob P. Byl, Christian Langpap, and Michael G. Sorice

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Endangered Species Act

Ecosystem Services

Environmental Economics

Working Papers

Incentivizing the Reduction of Pollution at Dairies: How to Address Additionality When Multiple Environmental Credit Payments Are Combined

Anaerobic digesters (ADs) can reduce waste volumes and capture methane emissions from concentrated animal feeding operations (CAFOs), but their adoption rate is low because their cost is high relative to other forms of waste management. Farmers who use ADs can attempt to sell carbon credits and nutrient credits as well as renewable electricity certificates (RECs) generated by on-site electricity production from captured methane. These credits and RECs can be used as marketable “offsets” that buyers can use to help meet their greenhouse gas and nutrient pollution reduction goals. One issue that arises is whether a single operation can sell into multiple credit markets by “stacking” credits—that is, receiving multiple environmental payments to finance the conversion to AD technology. This practice introduces the possibility that some credits might be “non-additional”—i.e., produce no incremental pollution reductions—and thus be suspect pollution offsets. Non-additionality in environmental credit stacking occurs when multiple payment streams do not produce incremental pollution reductions, thus allowing the credit buyer to pollute more than is being offset by the AD project. A possible solution to the stacking problem may be to allow stacking of all credits available at the time of AD installation, but to prohibit any further stacking if new credit streams become available after installation. This is a revised paper that was originally published in 2015.

Authors: Brian C. Murray and Tibor Vegh

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Environmental Markets

Policy and Design

Agriculture

Land

Environmental Economics

Energy Sector

National

Working Papers

The Clean Power Plan and Electricity Demand: Considering Load Growth in a Carbon-Constrained Economy

Release of the Clean Power Plan (CPP) marks a significant moment in U.S. climate policy, but a host of economic, technological, and regulatory factors are also driving significant change in the electricity sector, complicating state regulatory decision making. Ensuring access to reliable and affordable electricity while protecting public health is a central goal of state regulation of electric utilities. Thus, expectations about the future of the electricity sector in general, and the future of electricity demand and emissions trajectories in particular, will likely play an important role in state CPP decisions. This policy brief discusses load growth—rising electricity demand—in the context of CPP design choices and demonstrates that it may occur under either a rate-based or mass-based approach. Following a brief overview of the Clean Power Plan and state choices, including rate-based and mass-based performance standards, it summarizes recent trends in load growth and carbon dioxide emissions in the U.S. electricity sector, showing how electricity demand growth in the United States has been low for more than a decade while the carbon intensity of electricity generation has declined. It then explores how both rate-based and mass-based plans can accommodate load growth and future emissions. Although no CPP approach limits electricity generation growth to meet new demand, rate-based approaches and mass-based approaches that cover only existing sources also allow emissions from new sources to increase. Mass-based plans that cover new sources would not limit electricity generation growth, but they would limit emissions from all covered sources.

Authors: Sarah Adair, Christina Reichert, Julie DeMeester, and David Hoppock
 

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Climate and Energy

Clean Air Act

Policy and Design

State Utility Regulation

Environmental Economics

State Policy

Policy Briefs

Incremental Climate Policy via the Clean Air Act

The Nicholas Institute for Environmental Policy Solutions' Jonas Monast and Christina Reichert write in the American Bar Association's publication Trends that tegulators implement climate policy based on the law Congress enacts, not the law they may wish Congress would enact. For the Obama Administration, that law is the existing Clean Air Act. More Clean Air Act-based climate policy is on its way. In October 2015, the White House announced forthcoming regulations limiting emissions of climate-forcing hydroflurocarbons, and the Clean Power Plan potentially sets the state for carbon dioxide limits for existing facilities and other sectors. Step-by-step, the U.S. Environmental Protection Agency is developing a broad strategy to reduce the nation's greenhouse gas emissions using existing statutory authority.

Authors: Jonas Monast and Christina Reichert

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Climate and Energy

Clean Air Act

Policy and Design

State Utility Regulation

Environmental Economics

State Policy

Journal Articles

Coastal “Blue” Carbon: A Revised Guide to Supporting Coastal Wetland Programs and Projects Using Climate Finance and Other Financial Mechanisms

Coastal wetlands conservation and restoration efforts aim to preserve biodiversity and generate benefits to local communities. A diverse portfolio of financing sources has been used for these efforts, including philanthropy, multi- and bilateral aid, in-country governmental funding, tourism-related and other usage fees, and fees and levies associated with wetlands-centric extractive industries. More recently, recognition of coastal wetlands as carbon sinks has opened the door for wetland managers to explore funding sources directed toward climate change mitigation. But finding appropriate funding sources to set up a coastal wetland carbon project or to develop a national carbon program (which includes or is solely focused on coastal wetlands) is often a challenge. Additionally, carbon finance alone often cannot support the necessary management activities. This report updates Keep It Fresh or Salty: An Introductory Guide to Financing Wetland Carbon Projects and Programs (2014). It uses revised guidance for program and project developers (governments, NGOs, local communities) and extends analysis to other finance avenues that can link and complement carbon activities with non-carbon-based financing sources such as debt-for-nature swaps. Rather than recommending one mechanism over any other, it encourages users to think holistically about the range of benefits provided by coastal wetlands conservation for climate mitigation and adaptation in order to optimize the full range of financial mechanisms.

Authors: D. Herr, T. Agardy, D. Benzaken, F. Hicks, J. Howard, E. Landis, A. Soles, and T. Vegh, with prior contributions from E. Pidgeon, M. Silvius, and E. Trines

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Environmental Markets

Ocean and Coastal Policy

Marine Ecosystem Services

Law and Policy Mangement

Environmental Economics

Blue Carbon

Reports

Alternative Metrics for Comparing Domestic Climate Change Mitigation Efforts and the Emerging International Climate Policy Architecture

The availability of practical mechanisms for comparing domestic efforts aimed at mitigating global climate change is important for the stability, equity, and efficiency of international climate agreements. This article examines a variety of metrics that could be used to compare countries’ climate change mitigation efforts and to illustrate their potential application to large developed and developing countries. Because there is no single, comprehensive, measurable metric that could be applied to all countries, it suggests using a set of indicators to characterize and compare mitigation effort, akin to using a set of economic statistics to indicate the health of the macroeconomy. Given the iterative pledge-and-review approach that is emerging in current climate change negotiations, these statistics could enhance participation, commitment, and compliance if they can show that all parties are doing their “fair share,” both prospectively and retrospectively. The analysis highlights the need for a well-functioning policy surveillance regime.

Authors: Joseph E. Aldy and William A. Pizer

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Environmental Economics

Journal Articles

British Columbia’s Revenue-Neutral Carbon Tax: A Review of the Latest “Grand Experiment” in Environmental Policy

In 2008, British Columbia implemented the first comprehensive and substantial carbon tax in North America. By 2012, the tax had reached a level of C$30/t CO2, and it covered about three-quarters of all greenhouse gas emissions in the province. This article reviews existing evidence on the effect of the tax on greenhouse emissions, the economy, and the distribution of income, and it provides new evidence on public perceptions of the tax. Empirical and simulation models suggest that the tax has reduced emissions in the province by between 5 percent and 15 percent since being implemented. At the same time, models show that the tax has had negligible effects on the aggregate economy, despite some evidence that certain emissions-intensive sectors face challenges. Studies differ on the effects of the policy on the distribution of income; however, all studies agree that the effects are relatively small in this dimension. Finally, polling data show that the tax was initially opposed by the majority of the public but that three years post-implementation, the public generally supported the carbon tax.

Authors: Brian C. Murray and Nicholas Rivers

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Environmental Markets

Environmental Economics

Climate Change Policy

Energy Sector

Journal Articles

Biogas in the United States: Estimating Future Production and Learning from International Experiences

The substitution of biogas, an energy source derived from biological feedstock, for fossil natural gas (NG) can mitigate the build-up of greenhouse gases in the atmosphere, making it an attractive renewable energy source in a carbon-constrained future. Although upgraded, pipeline-quality biogas can augment the NG market supply in the United States, researchers and energy industry experts have little studied its long-term potential. This article estimates (1) levelized costs of energy for biogas production facilities operating with landfill waste, animal manure, wastewater sludge, and biomass residue feedstocks; (2) feedstock and technology pathway-specific biogas supply functions; and (3) the aggregate national biogas supply potential for the United States by 2040. Under a range of specified assumptions, generation of biogas could be expanded to approximately 3–5 percent of the total domestic NG market at projected prices of $5–6/MMBtu; the largest potential source comes from thermal gasification of agriculture and forest residues and biomass. As market signals have not spurred widespread adoption of biogas in the United States, policy incentives similar to those used in the European Union may be necessary to increase its production and use. Bioenergy policy in the European Union and the resulting market penetration achieved there provides important lessons for how biogas markets in the United States can overcome barriers to market expansion and, in doing so, provide substantial climate mitigation benefits.

Authors: Brian C. Murray, Christopher S. Galik, and Tibor Vegh

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Environmental Markets

Climate and Energy

Bioenergy

Regional Bioenergy

Environmental Economics

Energy Sector

Journal Articles

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